From lawmakers to members of the Sierra Club, Pennsylvanians joined last month in the international youth movement that's applying pressure to lawmakers to correct climate change. Photo: Jana Benscoter, Sept. 20, 2019.

Gov. Tom Wolf is about to take his biggest step yet in the fight against climate change by entering Pennsylvania into the Northeast’s multi-state system that promotes cleaner air by placing a tax on future carbon emissions.

Wolf, by an administrative action that may trigger future court challenges, is expected to announce Thursday the first steps to commit Pennsylvania to enter into full participation in the Regional Greenhouse Gas Initiative.

A press conference is scheduled for 9 a.m., and an administration source confirmed the topic is “beginning the process” of joining the initiative, or RGGI.

It is a step the governor hesitated on during his first term, sensitive to the politics of leading a state that has become one of the nation’s top energy producers, and that which gets about half of that production from burning fossil fuels like coal and natural gas.

Participating states agree to impose rules requiring power companies to buy credits, via auction, for each ton of carbon dioxide pollution emitted. Carbon dioxide is one of the most pervasive man-made ingredients in the building levels of greenhouse gases that are contributing to global warming.

It is justified, on a policy basis, by the added public costs that climate change is creating.

The number of credits allotted drops each year, again putting the onus on generators to decide between potentially paying more to emit carbon, or take steps to go in other directions and reduce their emissions.

Auction proceeds go back to the participating states based on the number of credits sold, where they are supposed to be plowed back into energy-related programs ranging from direct ratepayer payments to help offset rising costs, to research on new technologies, to programs intended to boost energy efficiency.

Legislative leaders here - if they don’t challenge Wolf’s move in total - are likely to demand input on how those proceeds are used, citing their Constitutional role in exercising the power of the purse.

Earlier this year, Wolf floated using RGGI proceeds as a funding source for his Restore PA public infrastructure program. RGGI rules, however, require that proceeds have some connection to promoting a cleaner energy future.

Thursday’s move, which has been anticipated around the Capitol for several weeks, is drawing praise from environmental advocates, who see it as finally putting some teeth behind climate change goals here that have so far rested almost entirely on market-driven - and self-limiting - change-outs of coal-fired generating plants for natural gas.

“It is a big deal,” said Joseph Minott, executive director of the Philadelphia-based Clean Air Council. “It is finally a recognition that a fossil fuel state like Pennsylvania needs to move forward to address its contribution to climate change.”

That contribution is major:

Pennsylvania’s annual energy sector carbon emissions of about 79 million tons are more than the pollution generated by the current RGGI states - Maryland, Delaware, New York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine - combined.

The targeted cuts - tied to 2005 emissions levels - are 26 percent by 2025, and 80 percent by 2050.

The 2025 goal seems within reach here, if only because of statewide shifts from coal to natural gas in the wake of the Marcellus Shale drilling boom. According to figures from the state’s Climate Action Plan, greenhouse gas emissions in 2015 were down 12 percent from 2005 levels.

But environmental advocates have argued that replacing coal with gas is only going to take the state so far, and that bolder steps will be needed to keep the momentum going.

Leaders of the gas-based energy industry and other business groups already see some problems with RGGI.

One lobbyist representing fossil fuel interests, commenting on background until he learned more about Wolf’s plan, told PennLive the obvious benefactors in the energy sector would be nuclear plant operators, who wouldn’t have to buy any credits for their zero-carbon power.

Their market position could also become stronger as older, coal-fired power plants are gradually retired.

The plan would hit the coal industry the hardest, the lobbyist added. Coal-fired plants emit the most greenhouse gas pollution and will see the relative cost of producing power rise more if the RGGI rules are applied here.

“RGGI is a targeted assassination of virtually every coal and waste coal-fired plant in the Pennsylvania, and the communities in which they operate,” the lobbyist said.

Other questions sure to receive great scrutiny in the coming months would include the potential impact on Pennsylvania’s energy consumers.

According to an analysis published by RGGI’s administrative support group, carbon emissions from power plants in the collective group have fallen from 133 million tons in 2008, the year before the program launched, to 70 million tons in 2018.

Those prices, of course, have likely been influenced by the simultaneous rise in natural gas production in the Marcellus Shale region. But program supporters have still been able to make the argument that a cap-and-trade program by itself will not cause rate increases.

In a separate analysis this year, professor Jose Miguel Abito of the University of Pennsylvania’s Wharton School found that as long as RGGI’s CO2 credit prices stay below $25 per ton, “electricity prices may actually decrease if Pennsylvania’s entry turbocharges retirement of old and inefficient plants and investment In new, more efficient plants."

In its most recent auction, conducted last month, credits netted an average price of $5.20.

RGGI has some built-in mechanisms designed to guard against price spikes. By its own rules, if credit prices exceed a certain level - currently about $10 per credit - additional allowances are allocated from a cost containment reserve to keep the market from spiking.

None of this will happen overnight.

New Jersey Gov. Phil Murphy opted to rejoin RGGI in January 2018. That state hopes to participate in its first auction next January.

Some here have also questioned Wolf’s ability to participate in RGGI without legislative approval.

Rep. Daryl Metcalfe, R-Butler County and chairman of the House Environmental and Energy Resources Committee, challenged Wolf’s Environmental Protection chief Patrick McDonnell on that issue in a public hearing last month, warning against what Metcalfe said he’d consider “a stealth operation... to enter into this.”

Three state senators recently introduced a bill that would codify legislative approval before the state could enter any such multi-state program.

But supporters of the move point to language in the state’s current air pollution control act that gives the Department of Environmental Protection the power to:

“Cooperate with... other states or any interstate agencies with respect to the control, prevention, abatement and reduction of air pollution, and where appropriate formulate interstate air pollution control compacts or agreements for the submission thereof to the General Assembly.”

More details on the Wolf Administration’s decision to use that power will be rolled out Thursday.

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